The debt crisis of the early 1980s had severe impact in Latin America and several developing countries. Closure of world capital markets led to inflationary financing of fiscal deficits, a slowdown in investment, and low rates of economic growth. Servicing external debt continues to be a key concern for policymakers in low-income countries. The crisis has led to a variety of proposals aimed at ensuring that debt burden does not hamper capital formation and growth world over.